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Good. Originally it was far too easy to use bankruptcy to get rid of student loan debt. That needed to be changed, but in doing so we swung too far in the other direction. We need to move more to the middle, and allow the debt to be discharged after sustained and honest efforts on the part of the student to pay the loans off have clearly shown that this just isn’t going to be realistically feasible.
Nope. A career lasts your lifetime. That's how long the debt should last. I can see deferring it (although how on earth can anyone measure "sustained and honest efforts") until a certain income level. But that is it. And after a certain amount of time, even that deferment should go away.
You used my money to get a degree. I get to demand that you pay it back.
Years ago, before loans were exempt from bankruptcy, I worked with a woman whose husband had gone to med school. They had a clear and unethical plan to avoid paying the loan back. He took low paying jobs in out-of-the-way locations, turning down good paying jobs that required a lot of work. They applied for, and got, the loan discharged in bankruptcy. The day it happened, they gleefully threw a party, because now they were "going to be rich". He immediately found a high-paying job in a good location. Before they moved, they were very vocal about how they had screwed the "sucker taxpayers".
That scenario has stuck with me all these years later.
Nope. A career lasts your lifetime. That's how long the debt should last. I can see deferring it (although how on earth can anyone measure "sustained and honest efforts") until a certain income level. But that is it. And after a certain amount of time, even that deferment should go away.
You used my money to get a degree. I get to demand that you pay it back.
Years ago, before loans were exempt from bankruptcy, I worked with a woman whose husband had gone to med school. They had a clear and unethical plan to avoid paying the loan back. He took low paying jobs in out-of-the-way locations, turning down good paying jobs that required a lot of work. They applied for, and got, the loan discharged in bankruptcy. The day it happened, they gleefully threw a party, because now they were "going to be rich". He immediately found a high-paying job in a good location. Before they moved, they were very vocal about how they had screwed the "sucker taxpayers".
That scenario has stuck with me all these years later.
So an 18 year old kid goes for a degree. Let’s say they make a mistake and pay too much and make too little in their career. It ruins their life financially. It’s a chain on them. This person isn’t even old enough to be able to make the decision to drink alcohol according to the state, but they can make a financial decision that will effect the rest of their life.
Now say you have a person addicted to drugs. Or gambling. Or maybe they’re just spending on vacations and tons of consumer items. They’re living lavishly and it all crashes down. They can file bankruptcy and remove their mistakes, which I would argue they were far more egregious.
But oh no, we could never allow the student to do it. You can’t take the education back? Sure. But you can’t take the fun and life expirences back that the person who racked up credit cards and had new cars, electronics, vacations, ect had either.
Ideally, 18 year olds would never be allowed to take on so much debt in the first place. There should be a limit on how much debt people can take on based on field of study, etc.
If the loans become dischargable in bankruptcy, I predict student loans will become harder to get. And honestly, that's a good thing. Not only would fewer young people find themselves up to their eyeballs in debt because of foolish borrowing, but employers might just have to change their ways as well. Right now they can only get away with requiring a Bachelor's degree for menial jobs because college degrees are in such over-supply to begin with.
But far too often today a college degree doesn't result in a career (unless you consider working at Starbucks as a barista a career).
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Years ago, before loans were exempt from bankruptcy, I worked with a woman whose husband had gone to med school. They had a clear and unethical plan to avoid paying the loan back. He took low paying jobs in out-of-the-way locations, turning down good paying jobs that required a lot of work. They applied for, and got, the loan discharged in bankruptcy. The day it happened, they gleefully threw a party, because now they were "going to be rich". He immediately found a high-paying job in a good location. Before they moved, they were very vocal about how they had screwed the "sucker taxpayers".
That scenario has stuck with me all these years later.
That scenario is why the laws were changed to begin with. And that is a very different situation from a student who's been working full-time for a decade or more at a low wage job (because that's all he can find) and can't get his loans paid off. Your acquaintances were deliberately setting out to defraud their lenders; the student I described is not, but is facing genuine hardship.
Nope. A career lasts your lifetime. That's how long the debt should last.
ive never heard anyone say this and it sounds quite irrational to me. education isnt a purchase of a career, it is a purchase of an education. it makes up one of many factors that go into your career. there is no reason to price it consistent with the long term value of your career for the rest of your life.
The actual rub here of course is that the college and universities have now established a cost based on the availability of funding from the student loans. So there is no going back.
It is also reasonably obvious that the government did not believe the loans would be repayable to normal bankruptcy terms. Otherwise why ban bankruptcy.
So we have a quite corrupt process taking advantage of the young.
The eventual answer will be free college education. We may temporize with some change to the bankruptcy restrictions. But in the end we will likely end up supporting at least the first four years of college.
They say the average student loan amount is $24k, for a 4 year university, in NOT buying it. I think it's got to be more. It would have cost me more that $24k to do the whole two year bit.
I don't buy that either. My original loan balance for my 4-year degree (actually 4 years plus one extra semester) was $25,358.56, and the school I went to capped your tuition so you paid the same amount per semester as long as you stayed enrolled, and I started in the Fall of 1995 and graduated in 2000. I only received tuition and room and board. Books and everything else was paid out of pocket, and the loan money always went to the school, never to me.
Last edited by ContraPagan; 06-15-2018 at 10:47 AM..
I think the availability of loans needs to decrease and cost will have to come down as the available credit does. Additionally I don’t think the loan proceeds going to the student is a good option as it can then be spent on anything. It’s a double edge though as most teenagers wouldn’t be able to get loans based on their own creditworthiness and/or certainly not at the interest rates comparable to what’s there in no discharge form
My mother was the one who used to do the loan applications with me (lovely chore, that!), and the money ALWAYS was allocated as going to the college, NEVER to me.
I didn't even think it was possible to receive student loan money until I started watching the court shows, and that was a shock - "where did you get the money you loaned to your boyfriend?" "My student loans."
WHA?????????? If that money is to pay for schooling, it should go TO THE SCHOOL, not the student. I never saw a penny of the money that paid for my degree.
The actual rub here of course is that the college and universities
have now established a cost based on the availability of funding from the student loans.
Tuition rates made artificially high to cover all manner of other campus expenses
beyond what is needed in the classroom.
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The eventual answer will be (single payer) college education.
Nothing is free.
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